The dielectric dispersion and relaxation process in melt-compounded hot-pressed poly(ethylene oxide) (PEO)-montmorillonite (MMT) clay nanocomposite films of 0-20 wt % MMT concentration were investigated over the frequency range 20 Hz to 1 MHz at ambient temperature. X-ray diffraction study of the nanocomposites evidences that the PEO has been intercalated into the MMT interlayer galleries with a helical-type multilayer structures, which results the formation of unique parallel plane PEO-MMT layered structures. The relaxation times corresponding to PEO chain segmental motion were determined from the loss peak frequencies of different dielectric formalisms and the same is used to explore the interactions compatibility between PEO molecules and the MMT nano platelets. It is revealed that the loading of only 1 wt % MMT in PEO matrix significantly increases the PEO chain segmental motion due to intercalation, which further varies anomalously with increase of MMT concentration. The real part of dielectric function at 1 MHz, relaxation time, and dc conductivity of these melt-compounded nanocomposites were compared with the aqueous solution-cast PEO-MMT films. Considering the comparative changes in the values of various dielectric parameters, the effect of synthesization route on the intercalated/exfoliated-MMT structures and the PEO chain dynamics were discussed.